Which of the Following Is a Required Disclosure in the Income

question 14

Multiple Choice

Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business?

• A) The gain or loss on disposal should be reported as an other income item.
• B) Results of operations of a discontinued component should be disclosed immediately below income from operations.
• C) Earnings per share from both continuing operations and net income should be disclosed on the face of the income statement.
• D) The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations.

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Definitions:

Linear Perspective

Linear perspective is a technique in art and photography that creates the illusion of depth and distance on a flat surface, using converging lines and a vanishing point.

Principle

A fundamental truth, law, doctrine, or motivating force, upon which others are based or derived.

Relative Motion

The movement of an object in relation to another object, considering both of their movements in a specific frame of reference.

Shape Constancy

The sensory experience in which an object's observed shape stays the same, even when the perspective or distance from which it is seen changes.